House Speaker Greg Stumbo's bill that would transfer late payments claims in Medicaid managed care has cleared its first committee.

The legislation moves dealing with late payment issues between health care providers and managed care organizations to the Department of Insurance's third party system. Currently, the Cabinet for Health and Family Services deals with those issues—but how those issues are dealt with has become a major issue in Kentucky's managed care system.

The legislation, House Bill 5, easily won approval from the House Health and Welfare committee. Stumbo said he just wants to ensure that frivolous denials stop. 

"But if the claims were just categorically denied for not really any reason to keep from making prompt payment then that's egregious in my opinion," Stumbo said.

The Cabinet for Health and Family Services has expressed concerns about the legislation, but Stumbo and other lawmakers say it won't change the current managed care contracts or threaten the system.

Rep. Ben Waide, a Madisonville Republican, said the bill should help resolve many issues with the Medicaid system.

"I'm pleased with the deliberate nature of this bill. I'm hopeful that it will be a big first step and that we will effectively be able to get our rural providers and hospitals paid for," Waide said.

The bill now heads to the full House for a vote.